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TECH TALK: Indias Digital Infrastructure: Network Computing Devices

So, we are in a funny situation in India in the context of the Internet. The mobile industry has plenty of devices but very few services. The PC industry has plenty of services but very few devices. As such, the real benefits of the Internet both for consumers and businesses arent easily visible and accessible. For urban consumers, the Internet can help ease lifes daily inconveniences. For rural consumers, the Internet can help increase incomes by providing access to information and markets. For businesses, the Internet can accelerate information flows and speed transactions creating real-time enterprises. And yet, for all practical purposes, the Internet has still not become an integral part of Indian lives. What needs to change?

For the PC Internet to take off, we need to get computing devices into Indian homes connected to the Internet cloud via DSL, cable or wireless broadband networks. (Given the regulatory realities and technical challenges, the best near-term bet is on DSL offered by the two government-owned telcos, MTNL in Mumbai and Delhi, and BSNL everywhere else.)

These computing devices need to be affordable and manageable just like mobiles phones. To make this happen, we need to think of thin clients or network computers. These are computers which will strip away the costs and complexity of todays desktops, without compromising on performance. At a sub-$100 (Rs 4,000 or so) price point, they will be affordable for the large Indian middle class. People will not have to make do with a few minutes of cybercafe usage every once in a while they will have a computer in their home for use whenever they want. This is what will make computing and the Internet a utility in their lives.

The $100 upfront cost will be complemented by a $10-12 monthly (about Rs 400-500) charge for connectivity and basic software and content services. The server infrastructure to complement the thin client will be at the telco exchange and thus, there will be no incremental cost for the last-mile bandwidth used. Besides the underlying operating system to provide the desktop, video and other bandwidth-intensive services can be co-located at these mini-Grids in telco exchanges to ensure fast access.

In fact, the network computing model also creates interesting opportunities for additional revenue through value-added services. The desktop could be made up of a collection of icons from different commercial entities each paying for the privilege of offering customers one-click access to their websites. One can think of this as analogous to the value-added services that exist on mobiles and account for 5-10% of revenues for the mobile companies.

For the network computing model to become a reality, MTNL and BSNL need to think of themselves as more than mere pipe providers and think of themselves as computing service providers. In doing so, they will resuscitate their landline business and create the computing infrastructure for PC-based Internet services to thrive. By leveraging their billing relationship with customers, they will also share in the upside as customers do transactions.

If MTNL and BSNL do not want to do this, they should, at the very least, allow BVNOs (Broadband Virtual Network Operators) to use their network to offer services in return for carriage charges. Either way, we need 50 million Indian households to experience the joys of home computing in the next five years.